Crypto asset investment manager Valour Digital Securities has launched a new ETP in Europe providing physically backed, staked exposure to Ethereum.

Ethereum is currently the second-largest cryptocurrency with a market cap of around $220 billion.

The 1Valour Ethereum Physical Staking ETP (1VET GY) has been listed on Deutsche Börse Xetra in euros.

Ethereum, currently the second-largest cryptocurrency with a market cap of around $220 billion, is the world’s leading smart contract platform. With its robust ecosystem, Ethereum enables developers to build decentralized applications that can reshape industries, eliminate middlemen, and bring greater transparency and efficiency to global systems.

The 1Valour Ethereum Physical Staking ETP offers institutional investors easy access to ether, the underlying token of the Ethereum network, through a liquid, regulated vehicle without the technical challenges of setting up private keys or crypto wallets.

It uses full direct, so-called ‘physical’ replication with each ETP share being 100% collateralized by a corresponding investment in ether. Physical (in a digital sense) ether tokens are stored using an institutional-grade custody solution provided by Copper.

The ETP also earns a passive return attributable to ‘staking’ income generated by the underlying ether.

Staking is a way of earning rewards for holding certain cryptocurrencies that work on a proof-of-stake consensus mechanism. Proof-of-stake mechanisms put their underlying cryptocurrency to work in verifying and securing transactions on the blockchain. Investors who choose to take part in this process ‘stake’ their cryptocurrency holdings and earn rewards for doing so.

Staked coins do not move from the secure custodian where they are stored, and the ETP remains 100% physically backed at all times.

The ETP comes with an expense ratio of 1.49%.